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Design DilemmaRenovatingBuilding a Home
feedingducks

Huge shortfall in budget.. what would you do?

Heather N
last month

Hi there.
We've have started a whole house renovation that was to have a very simple and small extension (more of a squaring off of an older weirdly shaped extension completed in the 70s/ 2010s.) The squaring off, though small in meterage, unlocked a much better layout.
We've had several bad surprises during our renovation and had to demolish more of the house than we wanted to (nearly all of the extension from the 70s). We've completed the groundworks, foundations, and strip out. What was a tiny extension is now a large double storey extension...
We are trying to get more accurate costs for everything that's still to happen, but the shortfall is looking pretty huge. It's a really cool mid-century house, so we wanted to do it justice with nice materials and a good look. Not doing anything mad budget wise, but things like getting custom fronts for Howdens carcasses, getting proper wood floors, good windows, etc. We need to completely overhaul things like insulation, heating system, windows, damp proofing, etc, and the house is now completely stripped out so has no kitchen bathrooms floors ceilings heating etc.
There are 3 levers we could pull
1. Try to trim the costs on every line item. So not go for Ufh/ ASHP, not have wooden floors, have uPVC windows, the cheapest kitchen and bathroom, etc etc. This feels uncomfortable because we know we'd still be spending a fortune on things we wanted to replace from day one, and if we ever had to sell, we might be negatively impacting value
2. Try to keep the quality, but not rebuild the area that has been demolished. This is uncomfortable because we lose a study (I WFH), a dining room that was connected to the kitchen, and a first floor terrace, and the house is quite a bit smaller than when we started
3. There's an area on the ground floor we were planning to turn into an annex to Airbnb, to help chip away at the mortgage. We could just do the essentials (floor, UFH, brick up garage door, replace windows) but leave electrics kitchen bathroom and all the finishing work until later. This is uncomfortable because the Airbnb income was part of our repayment plan, although we'd hope to still make things add up without it. We don't actually need this space, so it could just sit empty, as long as it doesn't ruin the thermal performance of the house. It could be used as a study if we do windows flooring and have temporary lighting. It's on the ground floor, and the kitchen is on the first, so wouldn't really work as a dining room.
While we are waiting for numbers, we aren't sure how big the shortfall is, but it's likely to be pretty huge. I know we have no moral entitlement to getting things done the way we originally wanted them... It's just hard to know which way is best to compromise!
Strategically, which lever would you pull to bring costs down significantly?
Thanks for any advice

Featured Answer
  • Jonathan
    last month

    You need to see a breakdown to work out where the costs will go. But given you have started you have to press on so the house is mortgageable and saleable should your circumstances change and you want to sell.

    In my opinion having a gas boiler and radiators and a £15,000 saving over an ASHP and UFH is a no brainer.

    I think you also need to be realistic about the rental income. It may be that you have a USP such as being in the middle of a cycling or walking area and therefore possible to get good occupancy. But if the reality is that your Air BnB would be a garage conversion overlooking your drive, in the middle of a residential area then your competition is budget hotels who will charge very little for a room bigger than a garage and give a cooked breakfast in the morning. So if you are projecting low rent and 35% occupancy (or less) then it could take more than 4 years to pay for the garage conversion leading to the conclusion that you should leave it as a garage. Or you might even conclude that a replan is in order and the kitchen can go downstairs reducing the need for an upstairs extension and roof terrace.

    And then you should be looking at the finish and deciding where to allocate funds. For instance windows- since UPVC is a part of most streetscapes I don’t think there is a problem considering them- especially if this is what is in many of the neighbours houses. Bathrooms- your plan probably has new bathrooms but could you continue to use the existing bathroom for the next few years and add a suite to your new Ensuite later?

    And you can get a quality kitchen with lots of appliances at a lower price point by buying second hand. There are lots of sites that specialise in this. The tip would be to buy a kitchen that has far more units and appliances than you need.

    Comments (22)

    • Sonia
      last month

      You could always do things in stages, so do the windows, insulation and heating first. With my house we had very little budget, so we added central heating, there was none, replaced the rotten windows with pvc ones and did the bedrooms so we had a cosy place to retire to. It was rather grim at times as the houses hadn’t been touched since the 1950s. There was barely any kitchen but the bathroom wasn’t too bad in an original 1930s style. A few years later, I think 3, we borrowed on the mortgage and were able to do the kitchen, bathroom and living room. Since then (1983!) we have made several more changes gradually over the years. I think a home is always evolving and being able to do it all in one go is all very well if you have a generous budget. Most of us don’t. Do not despair, make a priority list and work through it over time. Also sometimes you have to compromise - I wanted a walk in shower but with a tiny bathroom I had to settle for a corner quadrant instead. Not what I wanted but it does the job very well. Wishing you lots of luck with your refurb.

    • Isla Cherry
      last month

      I definitely would not go for a cheaper finish. It will impact the house's value should you need to sell quicker than you think. You would also hate looking at cheap finishes and might end up wanting to redo them anyway which would be total waste of money. I would do as much as you can now, and wait to do the rest properly. Is borrowing more money for better finishes out of the question? There is another option which is to wait for the finishes you want. You could get the cheaper howdens doors for now, prepare your floor subbase for a higher skirting for a wooden floor and have laminate in the interim. Just think what the better quailty finishes will require. For example its no use placing your skirtings directly above laminate if you will want to replace with a wooden floor in a year or two. I'm not sure this will save you enough money though as the labour rate is the same. Things like an ASHP have to be planned from the getgo. How much of the work could you do yourselves?

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    • Heather N
      Original Author
      last month

      Thanks very much everyone. We are now completely ripped out, the house is a shell and we are living with my mum, so there aren't any bathrooms or kitchens we are able to use, and we can't really do the work in stages, aside from parking the annex and what has now become the larger extension (most of this extension would now be replacing the areas we already had but had to demolish).


      We lived in the house for 2.5 years, but there was so much that needed doing - no working heating, roof leaking, ground floor pooling with water, windows and sills letting in slugs and water and cold air, kitchens and bathrooms quite grim, etc etc. We felt there were going to be huge economies of scale doing things like UFH all in one go... Then we started to find the big issues, we have impacted overall budget. Over the same time period, the cost of everything has gone up, including borrowing, which we'll be maxed out on.


      I considered project managing myself, but I'm freelance so would be better earning money doing something I'm good at and get paid for.


      We are switching builders (for a very long list of reasons) so waiting on some new quotes, at which point we'll probably have to do some reworking.


      There are certain things we can certainly do or finish doing later - we've done the base of the driveway, but can wait on the surfacing. Further external work can wait. We can do things like adding log-burners later. But we need to do all the fundamentals - electrics, heating, flooring, ceilings, insulation, roof, kitchens, bathrooms, damp proofing, windows, etc, so we can get back into the house asap. It sadly feels like we might have to park the 'extension', and just lose that chunk of house we had originally. It's also annoying not just to lose quite a lot of space, but it would definitely be cheaper overall doing everything in one go, than doing a separate extension in however many years.


      Interesting point about reworking the plans to make better use of the space that was going to be an annex. This is all inside the main house. So we might just have to make this space work really hard to make up for what we've lost, space-wise. But hold off putting in the kitchen and en suite we'd need to make it an annex. It still needs a lot of work to be usable in any way though.



    • Jen
      last month

      An alternative is to do the annex first and live in it while you work out what to do with the rest of the house.

    • Isla Cherry
      last month

      I would do less but do it to the highest standard. You don't want to spend time wishing later that you had done it properly. It costs the same to fit lesser quality as higher quality so you would be paying the fitting costs twice.

    • rinked
      last month

      The question is what CAN you afford to do now? Having been in a full renovation myself (1950s home) we spent the majority of our budget on windows and insulation. Like Jonathan says skip the UFH. Dry and warm is priority number one.

      For bathroom walls use plain white tiles and good quality fixtures, not top notch, but certainly not the cheapest ones (we bought a cheap toilet and i regret that, as the glazing is in poor condition). Our bedrooms have carpet coupons, spent less than 80 pounds on that. Our kitchen has a second hand quartz top, it took some time to find the corner that would fit, but with DIY ikea units it ended up looking lovely. We still have no ceilings in mudroom, wc, hallway, but the bones of the house are finished.

      And if the budget only allows working on the main house, the extension would have to wait. And i can imagine DIY becomes easier if you live onsite, so finishing the annex to live in it yourself for the time being would make sense.

    • rinked
      last month

      Perhaps post a floorplan so we can help see if there are any blind spots or missed oppurtunities?

    • Sonia
      last month

      Rinked’s post has reminded me that you can sometimes buy very good quality bathrooms items that are ex showroom. One of my local bathroom showrooms has a room for all the items removed from their showroom. I then bought an £850 toilet for £150. It’s the most valuable thing in my bathroom! It took 2 men to carry it upstairs as it was so heavy. So buying ex showroom quality items at a reduced price may be an option?

    • Heather N
      Original Author
      last month

      Ooh interesting re ex showroom bathrooms. I've looked at ex-display kitchens but it's a weird layout and seems cheaper just buying new. But for standalone things like sinks loos etc it's a good idea.


      @Rinked thanks for offering to look at the floorplans. Here is the existing house. I've marked everything that has been demolished in red, the walls that have been knocked through in orange, and the changes in levels in yellow (the house effectively has 5 levels, which makes modifying floorplans very tricky)



      Here are the proposed plans:







      Thanks so much!




    • siobhanmcgee90
      last month

      Do you have revised costs for the remaining work. You will have to be fastidious about reducing the scope of work to get within budget. A list with priorities and costs against each. If you can standardised as much as possible, you can make savings on big ticket items such as windows. PVC windows have vastly improved so give this serious consideration. You need to become the master of the spreadsheet

    • rinked
      last month

      How many people (adults, kids) in your household?

    • Heather N
      Original Author
      last month

      2 adults, 2 kids (so far!) Part of the reason for the annex was to rent now, then have the option for either of our mums to live with us if they needed to in the future.

    • siobhanmcgee90
      last month

      I’m sorry to be a party pooper but you now need to be very practical. A list of all your needs and wants together with the costs. Then decisions as to what is practical. Square footage is the obvious first question as the multiples go from that.

    • Heather N
      Original Author
      last month

      We are currently waiting on new costs from a new builder (we are switching for various reasons). I love a spreadsheet and am just waiting for the new numbers to plug into it. At that point we'll know how much we'll have to dial back. But a we expect it will be a lot, I wanted to explore different plans of attack.

      It's interesting to get opinions from people who are less emotionally invested, as a bit of a reality check or to hear a different perspective.

      Interesting that most people would not do the extension in favour of doing things "properly" with good materials in the rest of the house. Just a shame that the original tiny extension has uncovered issues leading to extra demo and we've lost a lot of house in the process. So the extension is now mostly reinstatement.

    • rinked
      last month

      Yep, no extension. And totally understandable it brings some grief, as you likely bought the house because of all the space it would provide. But it is what it is. And since the main goal is to live there with the 4 of you, i'd suggest start with roof-wiring-windows-insulation and then finish the first floor, be it without the new dining you had in mind and if possible with a showroom/secondhand kitchen and some vinyl flooring. Finish the two bedrooms and bathroom to a fairly high standard, as you only want to do these once for the upcoming X years. Then possibly finish the annex for the extra income, so you can start saving for the other two floors. And extending, well, long term planning..


      And always keep a eye out for cost reduction, both in materials and in trades. Keep the downstairs entertainment room for material storage, but keep an eye on overspending, as it can be wonderful to find bargains, but only buy when you are absolutely sure will be used.

      Anecdote: I still have a 'couple' sqm of white tiles in my cellar, as buying the whole pallet (which had gotten wet and couldn't be sold in store anymore) turned out cheaper than buying the amount we needed for bathroom, wc and kitchen. I might try to resell eventually. And i regret buying too much paint, as i tried some 8yo canisters and it took two weeks to dry (oh the anxiety!).

    • PRO
      Chestnut Interiors
      last month

      Are you working with a designer? I can help you phase/stage work logically, save money by maximising potential/trade discounts and know where to turn for fixtures and fittings within budget. Designers offer services at a range of price points, my membership for renovators would really help you 👷🏼‍♀️happy to help if you want to DM me 🙂

    • Jonathan
      last month

      Just a thought…..
      Since you are rebuilding the wing that is marked as office, and since you are escavating the entrance and lowering the floor level in the entrance is there opportunity to go further and even out the floor levels? The benefit as I see it would be that you then could relocate the kitchen to the office and create an aperture to the entertainment room so that you have a principal room at garden level. In turn this would mean you don’t have to build a first floor dining room which in turn negates the need for a roof terrace and a cheaper roof could be installed. You would also have a protected route from the bedrooms which would mean no sprinkler system required (although I concede that new stairs would spend that saving).

    • Jonathan
      last month

      Like this

    • Heather N
      Original Author
      last month

      @jonathan Thanks for having a look. All the amazing views are from the first floor, hence the living space being up there and the terrace. The split levels are typically mid century so we see them as part of the charm of the house. Practically, to move the house to three levels would be so expensive we may as well knock the whole thing down! Which we can't afford...

    • Heather N
      Original Author
      last month

      We did have a great plan from our first architect that put the kitchen downstairs and had a cool kitchen living space, but it turned out that we couldn't afford that. So we dialed back to our "modest" plans that I shared here... Which we now can't afford either. It's been a very expensive house with a lot more wrong with it than we expected.

    • Jonathan
      last month

      I suspect what I’m suggesting is not in fact equal to knocking the house down and starting again- and may well be a £20k -£25k saving.

      Assuming the new wing has new footings it can be built at a lower level for little difference in cost, you are lowering ground level outside the front door already. Changing the height of the hallway could be inexpensive but that depends on if it’s a solid floor or timber raised off the foundation. Lowering the floor in the former kitchen again depends on the original construction but since you are rewiring, re plumbing and re plastering much of these costs were already in the plan.

      So by my reckoning you save £25k by not building a first floor dining room, £10k for not building a roof terrace, £5k because of not needing a sprinkler system.

      Then you need to add £2k for an additional aperture on the entrance level, £4k for new floor joists, £8k for replacement stairs (and I bet you had already planned to spend some money on your existing stairs) and likely £3k of fees. So overall a saving

      I do understand that the first floor has good views but equally that means the entrance level has garden access and more privacy.

      And I think style wise the split levels wouldn’t be missed in fact the big glazing, open staircases and vaulted ceilings defines its 60s origins more than the split levels. And in my opinion it will feel bigger for having fewer changes in levels.

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